ECONOMIC IMPACT OF RUSSIAN INVASION TO UKRAINE: INDONESIAN GOVERNMENT'S RESPONSE BY INCREASING FUEL PRICES IN 2022

Abstract

This study aims to explain how the response of the Indonesian government by increasing the price of fuel oil (BBM) because of the Russian invasion of Ukraine. By using the theory of the decision-making process, this article discusses how the Indonesian government formulates and implements policies regarding the increase in fuel prices as a result of the Russian invasion of Ukraine which resulted in a supply shock and an increase in world crude oil prices. This article may be the first article that discusses in detail the Indonesian government's response to the increase in world crude oil prices, along with a discussion of the response of the affected Indonesian people. This article uses a qualitative research method, with data collection techniques using literature, and data processing from Twitter is done with NVivo 12 Plus which produces Word Cloud data. The Indonesian government's response to the raising of subsidized fuel prices was caused by several rational considerations that had two sides, namely advantages and disadvantages. The advantage is that by increasing fuel prices, the government can reduce the burden that must be borne by the state budget. The losses incurred are the burden on the lower middle-class people in meeting their needs for fuel, both for mobility and other needs. The Indonesian government adopts policies that maintain the stability of the country's economy by providing social assistance to the people so that people's fuel needs are still met.